Less risk with more benefit

Efforts to re-institute a state minimum wage law then up that wage from the federally-mandated $7.25 to $8.00 or $9.75 (depending on which of two bills passes) is simply wrong-headed.

First, it solves few to none of the problems sited by proponents. And if it does, the risks are too great.

By no stretch of the imagination do the proposals being discussed establish a living wage or come even close.

The baseline for a living wage requires that no more than 30 percent of it needs to be spent on housing. That means, based on a moderate apartment rental in New Hampshire, the minimum wage — at a bare minimum — needs to be $17 an hour, but more in the vicinity of $20 or better.

And “It’s not a cure-all to poverty,” Bob Pollin of the University of Massachusetts at Amherst told Marketplace.org. “In fact, the biggest source of low-income poverty is that people don’t have jobs at all.” (http://dailycaller.com)

What it does do is raise costs and thereby gamble with existing jobs — in New Hampshire as many as 14,000 of them, particularly the low-skilled such as those held by high school students.

Steve Grenier, co-owner of Lago’s Ice Cream in Rye, told the House Labor, Industrial and Rehabilitative Services Committee that he would have to sell 40,000 more cones a season to pay for just the 75-cent increase. Of course, he could up his prices, lose some undetermined amount of business because of it and hire fewer workers this coming summer.

All of which leads us to ask: can New Hampshire afford to gamble with its unemployment rate and increasing the looming state budget deficit.

Legislators inclined to vote for a minimum wage bill should be reminded that a good chunk of state revenues comes from the rooms and meals tax, levied on many minimum-wage employers, like Lago’s, which stand to lose business and revenues of their own along with the state. Can the state also handle the added costs which must be born in social services for some of those unemployed?

Instead of risking a downward spiral of higher unemployment and lost state revenues, legislators should focus on job creation. These would be jobs that make employers compete for workers and which naturally raise incomes.

Not only is this the hands-down better way to increase pay, it is the least risky.

Editor’s note: Living wage numbers and calculations based on information from universallivingwage.org and http://hotpads.com.